Telus looks to growth in data plans as it delivers flat third-quarter profits

CP

Telus Corp. (TSX:T) says there's plenty of room to boost performance in its wireless business as Canadians devour a growing quantity of data through their smartphones.

Chief executive Joe Natale told analysts Thursday he keeps close tabs on data consumption trends at the telecom company, and found that overall usage is doubling every 18 to 24 months.

"I think fundamentally, there is still great opportunity for average revenue per user growth within our business," he said, after the company delivered its third-quarter financial results.

"We'll continue to have an expansion of the base as we look for a stronger mix of customers that have bigger data appetites."

Telus reported a third-quarter profit of $355 million, or 58 cents per share, on $3.03 billion in revenue. That was compared with $356 million, or 56 cents per share, on $2.87 billion in revenue a year ago as it recorded higher restructuring costs and early debt repayments.

On an adjusted basis, which excluded those costs, the company said it earned $387 million or 64 cents per share, up from $365 million or 58 cents per share, and three cents per share above expectations, according to Thomson Reuters.

Telus has been racking up subscribers to its wireless services driven by high-end data devices like Apple's iPhone, Samsung's Galaxy models and BlackBerrys. The company added 113,000 net new postpaid users in the third quarter, bringing the total number of overall subscribers to 7.99 million.

The growth helped drive wireless revenues 7.7 per cent higher, up $122 million, to $1.7 billion. Wireless network revenues were up by 6.6 per cent, or $95 million, to $1.54 billion in the period.

Earlier this week, Telus announced a distribution agreement that will allow it to carry Bell Media's upcoming video-on-demand service on Telus Optik TV set-top boxes that will compete with Netflix and the Shomi streaming video service being launched by Rogers and Shaw.

While Natale has decided to play ball with Bell, one of its biggest competitors in wireless, the company has no plans to make its own foray into the world of making TV shows and movies that could be sold to over-the-top services.

"Our job at Telus is to scour the world looking for content that our customers will value the most," he said in an interview.

"Owning content is not fundamental to our strategy. Our skills and focus are better served in the broadband business."